Lagging, though, were a number of large financial stocks in the region. Amid fresh declines in Treasury yields, major Japanese life insurers including Dai-ichi (8750.TO) fell 0.9% and Resona (8308.TO) dropped 1.1%, while other large financial companies there also fell. Australia's big banks were also modestly underperforming.

Signs that interest rates would remain low continue to weigh on Japanese financials, said Hisao Matsuura, chief strategist for equities at Nomura Japan. The Bank of Japan's opinion summary on Monday said the best way to reach 2% inflation is to stick to current monetary policy.

That came as the Bank for International Settlements, a consortium of central banks, said Japanese banks are vulnerable because of their increased U.S.-dollar exposure. With dollar assets topping $3 trillion, those lenders could get hit with a funding gap; last decade's global financial crisis highlighted such risks.